Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context

Question 166: To ask the Minister for Justice and Equality his policy on upward only rent reviews. [13165/12]

Alan Shatter (Dublin South, Fine Gael)
Link to this: Individually | In context

The Deputy will recall that the Government announced in December last that it had decided not to proceed with legislation to abolish upward only rent reviews in existing commercial leases, i.e., those entered into prior to 28 February 2010. There was a substantial concern that any legislative scheme involving interference in the contractual relationships of private parties would find it extremely difficult to survive a Constitutional challenge. In addition, at this difficult time in our economic circumstances, the Government was advised that any model proposed would require the payment of compensation to landlords whose rights were infringed in order to ensure that the proposal would be compatible with the Constitution and the European Convention on Human Rights. The Government was strongly of the view that payment of compensation to landlords in such circumstances could not be justified in the current economic climate.

While legislative intervention in this area may not be practicable, there is nothing to prevent landlords from engaging with their tenants in order to reach agreement on appropriate rent levels and the Government is strongly of the view that such engagement is highly desirable. I would also note that the Minister for Finance, in the context of his budget speech, has outlined the role which NAMA can play in dealing with the problems caused by upward only rent reviews which apply to NAMA properties.